ConsenSys founder ‘bullish’ on Ethereum following crypto winter performance
Ethereum co-founder and ConsenSys founder Joe Lubin says ETH’s relatively stable value through crypto winter is reason to be bullish about Ethereum’s future.
With Ethereum showing resilience through the latest cryptocurrency winter, ConsenSys founder Joe Lubin says he’s ‘bullish’ over Ether’s (ETH) relative stability through compounding macro events.
Cointelegraph Magazine editor Andrew Fenton spoke to Lubin at the Web3 event Building Blocks 23 in Tel Aviv, Israel, for an all-encompassing interview around the current state and future of the Ethereum ecosystem landscape.
The co-founder of the preeminent smart contract blockchain protocol touched on a number of subjects, including ETH’s market performance over the past year. A myriad of macro events, including the collapse of algorithmic stablecoin Terra/LUNA and the demise of cryptocurrency exchange FTX, played their role in what Lubin described as a blow off top for the ecosystem:
“We do this thing as you know, where we get irrationally exuberant, and then there’s a blow off top, higher highs, lower lows.”
Lubin likened the past 12 months to the early 2000s, where the dot-com boom and bust saw ‘crazy ideas’ explored driven by ‘exuberance’ for geopolitical, economic and ecosystem reasons. He believes the same type of exuberance may not drive investors in the crypto space in the near future but sees potential for more great projects and ‘tremendous innovation’:
“I think we’re in a phase where we have built enough enabling infrastructure. We built scalability, usability, and now we can build more useful use cases.”
Despite a tough year for the cryptocurrency markets, Lubin takes positives out of the resilience of the Ethereum ecosystem and the value being realized by ‘high profile companies’ exploring what can be built within nonfungible token (NFT) space in particular.
Related: What’s in and what’s out for Ethereum’s Shanghai upgrade
The ConsenSys founder added that ETH’s ability to hold its value around $1200 for an extended period while certain ‘CeFi’ players imploded was reason to be positive for the future of the ecosystem:
“It feels like there just weren’t people who would sell the token at lower prices. And that’s a good thing. I’m bullish from here.”
The Ethereum Merge also played an important role in the market value of ETH in recent months. Part of Ethereum’s move to proof-of-stake consensus was the introduction of its fee-burning mechanism, which saw Ethereum become deflationary for the first time in November 2022.
Lubin also touched on this subject, highlighting his belief that making ether deflationary was important to ensure the underlying asset increases in value over time:
“There’s money that you spend to buy a coffee. There’s money that you invest. There’s money you can lend and borrow. You want sort of your high economic bandwidth money, like ether, to be very fresh and to appreciate in value.”
The Ethereum co-founder also said he was confident that the Ethereum ecosystem would not see any further changes in its monetary supply and that a continual contraction of the monetary base was likely to continue.
“I think a slow contraction is reasonable, or at least if you smooth that we’ll certainly have ether locked in the protocol and we’ll have ether locked in other kinds of DAO voting systems, DeFi, etcetera. I do think that’s valuable for the ecosystem.”
Ethereum is now gearing up for the upcoming Shanghai hard fork, of which an important feature will be the enabling of staked ETH in the Beacon Chain and rewards to be withdrawn by users. Ethereum foundation developers have been aiming for March 2023 as a tentative deploy date.